Gold Futures Hit ₹1.44 Lakh Per 10 Grams

Gold prices on Monday rose by Rs 984 to Rs 1.44 lakh per 10 grams in futures trade. This increase was driven by a weak US dollar in overseas markets and easing geopolitical worries, which boosted demand in physical markets.

On the Multi Commodity Exchange, the yellow metal contracts for August delivery traded higher by Rs 984, or nearly 1 per cent, to Rs 1,44,090 per 10 grams in a business turnover of 591 lots. The domestic front also saw an increase, with gold futures for August delivery rising by Rs 2,200, or 1.6 per cent, to close at Rs 1.43 lakh per 10 grams during the last week.

According to Gaurav Garg, Research Analyst at Lemonn Markets Desk, gold prices rose on Monday as investors increased buying following a temporary pause in Washington-Tehran hostilities and ahead of this week's US Federal Reserve interest policy decision.

In the overseas markets, Comex gold futures for August delivery rose nearly 1 per cent to USD 4,087.69 per ounce in New York. Last week, gold edged up USD 52, or 1.3 per cent, to settle at USD 4,070.8 per ounce.

Manav Modi, Commodities Analyst at Motilal Oswal Financial Services Ltd, stated that gold prices traded higher, driven by a weak dollar and easing geopolitical tensions after the US and Iran paused military strikes over the weekend. However, gains remained limited as investors awaited the Federal Reserve's policy decision later this week.

The US President's decision to halt the bombing campaign after 13 consecutive days to allow diplomatic efforts to proceed, while Iran refrained from retaliatory attacks, led to a sharp decline in crude oil prices of more than 7 per cent in both domestic and international markets. This eased immediate concerns over supply disruptions through the Strait of Hormuz and the Red Sea.

The softer US dollar index further supported bullion by making it more attractive for overseas buyers. Weaker oil prices helped reduce near-term inflation fears, even as uncertainty surrounding global trade persisted following the US decision to impose fresh tariffs of 10-12.5 per cent on imports from several trading partners.

Investors are closely monitoring Federal Reserve Chair Kevin Warsh's speech for guidance on the future interest rate path and inflation outlook. The Fed's policy outcome is expected to be the key driver for bullion prices in the near term.

The increase in gold prices is significant, especially considering the current economic climate. As the global economy continues to navigate through uncertain times, investors are looking for safe-haven assets like gold. The upcoming US inflation and labour market data will also be closely watched, as it will provide further guidance on the future interest rate path and inflation outlook.

In conclusion, the rise in gold prices is a result of a combination of factors, including a weak US dollar, easing geopolitical tensions, and uncertainty surrounding global trade. As the Federal Reserve's policy decision approaches, investors will be closely watching the market for any signs of change in the interest rate path and inflation outlook.

The impact of the gold price increase will be felt across various sectors, including the jewellery industry, which is a significant contributor to India's economy. The increase in gold prices may lead to higher costs for jewellers, which could result in higher prices for consumers.

Overall, the rise in gold prices is a significant development, and its impact will be felt across various sectors. As the global economy continues to evolve, it is essential to keep a close eye on the market trends and developments.